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The new saga begins – Ambani brothers get together!

I have been following the news about the bitter animosity between Ambani brothers..after de-merger and the truce signed in 2005 – that was initiated by their mother Kokilaben and series of stories involving both of them.

Anil went to the extent of spewing his anger in the Press too. Anil, the younger one, is emotional and did not leave any stone unturned to get gas for ADAG group member, Reliance Natural Resources, at the price acceptable to him in the family agreement between the brothers.. ( refer my earlier post) But then, the government intervened and the Supreme court ruled in favour of Mukesh Ambani taking interest of the government as prime.

Then, the Mukesh Ambani group blocked the efforts of Anil to sell a stake of Rcom ( Reliance Communications) to MTN, South Africa, in exchange of a stake in MTN, the largest telephone network in South Africa. By using ‘First Right of Refusal’ clause in the family agreement, Mukesh stopped the merger. And the mud slanging between them (after this act by Mukesh) in the Press was unexpected and unfortunate. It was also embarrassing to all concerned. Personally, I thought that this frenzy would not end ever but the unexpected happened…the brothers got together, scrapped off the ‘non compete clause’ from the family agreement they signed in 2005.

In the meantime, Anil tried and bid for constructing the International airport at Vashi, Mumbai. But, the contract was awarded to GVK. Besides this, Anil bought fame adlabs, signed an agreement with Steven Spielberg to make movies etc. Both brothers were focused to enlarge their corporate group – though due to non-compete clause in the understanding between them – there was a cold war between both the brothers.

‘Backward Integration’ – a concept – was pioneered in India by their father Dhirubhai Ambani, and ample profits were earned and kept within the group. This also enabled Dhirubhai to control profits in the supply chain. So, now this recent reconciliation between brothers is reminding me of genius Dhirubhai. What will happen if both brothers bring forth synergism between their business activities? Will it lead to more ‘unthinkable’ profits?? ( it is scary…with RIL group ( Mukesh Ambani) declaring to make his $ 80 billion group in to $160 billion group in the next ten years!)

Let us note some developments which have taken place in the last 15 days, after ‘non-compete clause’ was removed: